Correlation Between Ultra Clean and J+J SNACK
Can any of the company-specific risk be diversified away by investing in both Ultra Clean and J+J SNACK at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ultra Clean and J+J SNACK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultra Clean Holdings and JJ SNACK FOODS, you can compare the effects of market volatilities on Ultra Clean and J+J SNACK and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ultra Clean with a short position of J+J SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and J+J SNACK.
Diversification Opportunities for Ultra Clean and J+J SNACK
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ultra and J+J is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and JJ SNACK FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJ SNACK FOODS and Ultra Clean is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ultra Clean Holdings are associated (or correlated) with J+J SNACK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JJ SNACK FOODS has no effect on the direction of Ultra Clean i.e., Ultra Clean and J+J SNACK go up and down completely randomly.
Pair Corralation between Ultra Clean and J+J SNACK
Assuming the 90 days horizon Ultra Clean is expected to generate 2.66 times less return on investment than J+J SNACK. In addition to that, Ultra Clean is 3.48 times more volatile than JJ SNACK FOODS. It trades about 0.02 of its total potential returns per unit of risk. JJ SNACK FOODS is currently generating about 0.15 per unit of volatility. If you would invest 15,400 in JJ SNACK FOODS on August 27, 2024 and sell it today you would earn a total of 600.00 from holding JJ SNACK FOODS or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Clean Holdings vs. JJ SNACK FOODS
Performance |
| Timeline |
| Ultra Clean Holdings |
| JJ SNACK FOODS |
Ultra Clean and J+J SNACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Clean and J+J SNACK
The main advantage of trading using opposite Ultra Clean and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, J+J SNACK can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in J+J SNACK will offset losses from the drop in J+J SNACK's long position.| Ultra Clean vs. ASML HOLDING NY | Ultra Clean vs. Applied Materials | Ultra Clean vs. Superior Plus Corp | Ultra Clean vs. NMI Holdings |
| J+J SNACK vs. Superior Plus Corp | J+J SNACK vs. NMI Holdings | J+J SNACK vs. Origin Agritech | J+J SNACK vs. SIVERS SEMICONDUCTORS AB |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Valuation module to check real value of public entities based on technical and fundamental data.
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